Official figures recently released have shown that the Enterprise Finance Guarantee (EFG) – introduced by the Labour Government to assist businesses to ride out the recession – have dropped by almost 60% in the last 12 months. So what does that mean to business owners – and what can you do to become more self-reliant?
Whilst the recession is, we are told, officially over, the vast majority of businesses are still feeling the pinch, as consumer and business-to-business spending is still remaining guarded. What’s more, the shackles are still firmly on bank lending policies – so if you find yourself in financial hot water, finding outside assistance to get your business back on track may be more difficult than you think.
Essentially, every business should continue to keep its eye on the ball when it comes to expenditure, with a view to retaining as much capital within the business as possible. So Fusion Accounts – the online accounting software specialist -has put together a few ideas on how to hold onto that precious capital – without impacting upon your business.
1. Capital expenditure – is it really necessary?
Whilst every business requires a certain element of capital expenditure to offer the right level of service, it’s time to box clever. Only invest in capital purchases if it’s going to have a direct influence upon your business profits and efficiency. For example, buying online accounting software will enable you to track your financial performance more accurately, and therefore increase your business efficiency – essential in these challenging and competitive times.
2. Buying? Spread the cost
Whatever you need to invest in – whether it’s capital expenditure or not – seek out the deals which enable you to hold onto your cash for as long as possible. For computer equipment, for example, there are great deals available for ‘buy now, pay next year’ – although remember to account for the delayed payment in your forward budgeting, so that you don’t receive a nasty surprise. In cloud computing land, there are also fantastic deals to be found whereby you can spread your payments monthly for your software, with no financial commitment. Online accounting software such as Fusion Accounts enables you to pay a low monthly fee with no tie-in or upfront payment, which makes canny financial sense.
3. Make the most of your accountant
Is your business running as effectively as it can? If you’re only using your accountant to compile your VAT returns and end of year accounts, you’re missing a trick. This is one of the times where investing a little extra in professional advice and support will pay you back many times over in increased savings. Your accountant can not only help you in advising where you can save in tax liability, but also how to structure your financial planning to save on overheads. Make your accountant part of your business and give them unlimited access to your online accounting software so that they can really get to grips with your finances – and you won’t regret it.
4. The best things in life are free
If you look hard enough, you’ll find plenty of free support and assistance for your business just waiting to be taken up. It’s time to think outside the box, for ‘free’ can come from a variety of sources, such as advice and help from other businesses. Look at free-of-charge areas such as skills trading to achieve what you can’t afford to pay for in cash.
Remember that others are also interested in ‘free’ as well – so what can you offer? Free advice workshops and taster sessions can reap huge financial rewards, so don’t be afraid to put yourself out there.
5. Work together and share the cost
Small businesses often struggle with crippling overheads which can, in times of downturn, threaten to move them from ‘getting by’ to ‘unviable’. So, if you’re feeling the pinch, you can bet there are others in your area feeling the same, too. Office and premises sharing could be the answer to cutting your overheads, as well as opening up new channels to joint collaborations and new windows of opportunity.
As Government figures and the change in leadership has demonstrated, financially we’re far from being out of the woods yet. So, safeguard the future of your company by boxing clever with your finances – and don’t forget, make your accountant your new best friend!
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